Đề 1

The risk of commercial banking: that may reduce the probability of the banks to reach its initial goals.
Risks potentially lead to losses to the bank.

Example:  the financial crisis in 2008, the implosion of the housing market the same year, and the
financial challenges faced across the sector caused by economic instability in the wake of the
coronavirus pandemic.

1. information asymmetry occurs only before the loan gets approved by the bank. F

2. banking services have developed significantly in recent years and accounting for a growing proportion
of a bank. T

3. Non-interest expenses account for a relatively low share of the bank’s total expenses because it
depends heavily on the fluctuations of the interest rate. F

 Non-interest expenses account for a relatively low share of the bank’s total expenses because it
less depends on market interest rate fluctuations.

Đề 2

What are the main benefits of consumer lending to commercial banks and their customers?

1. Off-balance sheet items are not included in the bank’s assets because these items do not generate
any incomes or expenses. F

 Off-balance sheet items are not included in the bank’s assets because according to common
accounting standards.

2. The main objective of risk management in banking business is to eliminate banking risks. F

 The purpose of risk management is to identify potential problems before they occur, or, in the
case of opportunities, to try to leverage them to cause them to occur.

3. Cash and deposits from other depository institutions are the most liquid assets. Therefore, they
account for the largest proportion of total assets of the bank. F

 Cash and cash equivalents are the most liquid assets

BT: A family plans to buy an apartment that is worth VND 1875 billion. They decide to ask for a loan
from the bank. The bank agrees to finance up to 75% of the value of the asset. The credit contract has
some following terms:

- Loan duration: 4 years

- Interest rate: 10%/year, interest is calculated following the simple method
- Repayment period: semi-annually

a. calculate the loan amount. If the aparment is used as a colleteral, what are the potential risks to
the bank?

b. show the loan repayment plan, which includes the principal and interest the customer needs to
pay for cash period.

Giai

1. I = P * r *T

1/ Loan amount = 1875 x 75% = 1406.25

List some risks: refer to chapter 2

2/

Period B Principal Interest Total payment C

1406.25
1. 1406.25 175.78 70.31 246.09 1230.47
2. 1230.47 175.78 61.52 237.30 1054.69
3. 1054.69 175.78 52.73 228.52 878.91
4. 878.91 175.78 43.95 219.73 703.13
5. 703.13 175.78 35.16 210.94 527.34
6. 527.34 175.78 26.37 202.15 351.56
7. 351.56 175.78 17.58 193.36 175.78
8. 175.78 175.78 8.79 184.57 0.00

BT:

- Current account (0,75% annually)

- Savings account (3,75% annually, plus 0,5% via online savings accounts), any amount withdrawn
before the due date would get the return of current accounts.

a. A customer who has $15.000 savings, and is thinking of depositing this money into this bank via
branches. Calculate the interest this customer would receive for the 12-month period for each type
of deposits. Comment on the results.
 b. the client chooses an online savings account to deposit the money for 9 months. How much
interest would he get? Comment on the results.

Giai:

a. The interests for current account = 15 000 * 0,75% = $112.5

The interests for saving account = 15 000 * 3,75% =$ 562.5

Comment: the interest for saving account is better than current account -> The
customer should choose saving account

b. She withdraws her deposit after 9 months

The interest(branches): 15 000 * 3.75%/12 *9 = $421.875

The interest (online): 15000 * (3,75% + 0,5%) * 9/12 = $478.125

BT: A commercial bank announces the annual interest rates on its types of deposits as
following:

- Current account (0,75% annually)

- Savings account (2,75% annually), any amount withdrawn before the due date would
get the return of current accounts.

a. A client who wants to save $15.000 for 12 months in the bank. Calculate the interest for
each type of the deposits. Give a short comment on the results.

b. The above client decides to deposit her money for 9 months. How much interest would
this client receive if: (1) She withdraws her deposits after 9 months, (2) She withdraws her
deposits after 6 months. Comment on the results.

Giai:

a. the interest form current account: 15000*0,75% = $112.5

the interest from savings account: 15000*2,75% = $412,5

the interest from savings account is higher than current account. Customers should choose
savings account to get the best interest rate.

b.
(1) She withdraws her deposits after 9 months

The interest: 15000*2.75%*9/12 = $309.375

(2) she withdraws her deposits after 6 months

The interest: 15000*0,75%*6/12 = $56,25